It has long been established that, in law, a company and its directors are different legal entities. They are different people, and you choose the people with whom you enter into contracts.
So, if you have a contract with a company, you might for example want separate guarantees from the directors, so as to establish a direct contractual relationship with them, if you want to hold them liable. The argument goes like this. It is much the same sort of argument as where an employee does something wrong, and commits a tort, in the course of his employment: both he and his employer are liable as joint tortfeasors for the same damage. For example, in some situations, you may find yourself suing an LLC with no assets.
However, if you find that any individual owners have personally guaranteed the debts of the LLC, you may still have an avenue to recover what is owed. Even in cases where an individual owner did not personally guarantee the debts of the LLC, you may still be able to sue an LLC owner personally. When piercing the corporate veil, courts may ignore the limited liability status of LLC members and hold them personally liable.
However, this can only be done in certain situations. Generally, courts desire to uphold the protections provided by the LLC business structure. Thus, they will typically pierce the corporate veil and hold individual owners personally liable only where there is wrongful or fraudulent conduct or where there is no true separation between the LLC and its owners. Factors that some courts may consider in determining whether to pierce the corporate veil include whether the LLC:.
However, it is important to note that the laws in Florida regarding piercing the corporate veil are more restrictive than in other states. In fact, Florida Statutes section Previous Next. Many Company Directors believe that being part of a Limited Company protects them against being sued personally. Whilst a Limited Company does offer an element of protection, there are no guarantees, and a growing number of directors are being sued personally for actions they carried out on behalf of a company.
Why would someone take legal action in the first place? Why would a director or senior manager become involved? How can claims occur?
The following are some real-life examples of claims that have occurred: A former director of a company sued the remaining directors, claiming that they were responsible for a shortfall in his pension funds due to the way they had administered his pension during his employment.
A firm and a number of its senior staff were named in allegations of illegal price-fixing. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state.
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